In March 2018, Vietnam stock market may fluctuate

Picture for illustration. Internet.

Many stocks have recovered

Mr. Nguyen Duc Hung Linh, director of the Saigon Securities Inc, a personal investment consultancy, said in his analysis that in the short term Vietnam stock indexes have recovered positively in recent trading sessions. The recovery occurred on a large scale in most classes of shares, with leading shares such as stocks, banks, real estate... recovering from a short-term low by 15-25%. Some shares in the leading group even had a 30% increase compared to their lowest price in the decline before the Lunar New Year.

Mr. Linh also analyzed that many stock groups that have recovered from their lowest point in the short term will make a profit, taking the pressure off for increases in the first week of March, especially when the major indexes gradually go back to the old peak.

After the Lunar New Year, money inflows into the market dipped even though the stock indexes had strong increases (trading value was about 60% of the average level before Tet). Therefore, many investors will be cautious when deciding to invest in this period.

For “surfing” investors, those who bought at bottom price before Tet, may continue holding stocks with 70-80% ratio to wait for higher prices, then take profits. However, with stocks that have risen above 20%, they should actively take profits as the market has signals of weakening momentum.

For medium and long-term investors, the experts analyze, the large adjustments of the market will be good opportunities to increase the proportion of shares with high growth business results in 2018, especially when the medium and long-term growth outlook of the world and Vietnam stock market is still positive.

Accordingly, the Vietnam stock market is predicted to fluctuate in March.

Many events can impact on the market development

According to the experts, though the price of many shares have increased sharply, it has areas for medium term investment, even for short-term.

In the short term, the market in March will be effected due to its rebound since the beginning of the year. In addition, many sessions before the Lunar New Year reduced sharply, affecting investor psychology, causing them not to take profits. But in the long term, Vietnam stock market is forecasted to increase.

According to these experts, March is expected to record events that will impact on the Vietnam stock market, such as 2 funds of VNM ETF and FTSE ETF will restructure portfolios from March 5 to 16 March, 2018. The activities of buying new shares and selling old shares in the portfolio of these two funds will have some impact on the price movements of the stocks involved, thus affecting the overall performance of the market.

In addition, the meeting sessions of the Federal Reserve System (FED), which is expected to raise the interest rate of the US dollar for the first time in 2018, will take place between March 20-21. The interest rate fluctuation in the US has impacted on the Vietnam stock market recently.

Besides the strong decrease of the global stock indexes, by the end of January and early February 2018, it is considered as a negative reaction to capital flow as the interest rate of US Government bonds increased sharply. The previous interest rate increase by the FED showed that the stock market movements are mainly changing as the investors are cautious.